China Shineway Pharmaceutical Group Ltd reports 16.5% CAPEX growth while 7.8% Revenue decline
30/03/2016 • About China Shineway Pharmaceutical Group Ltd (
$2877) • By InTwits
China Shineway Pharmaceutical Group Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- China Shineway Pharmaceutical Group Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 12.0%. At the same time it's a lot of higher than industry average of 8.2%.
- CAPEX is quite volatile: 121 in 2015, 104 in 2014, 262 in 2013, 369 in 2012, 397 in 2011
- The company has highly profitable business model: ROIC is at 13.3%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
China Shineway Pharmaceutical Group Ltd ($2877) key annual financial indicators
| mln. CNY | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 1,985 | 2,132 | 2,187 | 2,229 | 2,055 | -7.8% |
| Gross Profit | 1,302 | 1,392 | 1,474 | 1,478 | 1,361 | -7.9% |
| SG&A | 485 | 676 | 701 | 697 | 678 | -2.8% |
| EBITDA | 949 | 806 | 877 | 904 | 864 | -4.4% |
| Net Income | 756 | 648 | 684 | 705 | 658 | -6.7% |
Balance Sheet
|
|---|
| Cash | 2,173 | 2,212 | 2,292 | 2,688 | 2,826 | 5.1% |
| Short Term Debt | 0 | 0 | 500 | 200 | 0 | -100.0% |
| Long Term Debt | 0 | 0 | 0 | 0 | 0 | |
Cash flow
|
|---|
| Capex | 397 | 369 | 262 | 104 | 121 | 16.5% |
Ratios
|
|---|
| Revenue growth | -2.6% | 7.4% | 2.6% | 1.9% | -7.8% | |
| EBITDA growth | -4.8% | -15.1% | 8.8% | 3.0% | -4.4% | |
| Gross Margin | 65.6% | 65.3% | 67.4% | 66.3% | 66.2% | -0.1% |
| EBITDA Margin | 47.8% | 37.8% | 40.1% | 40.5% | 42.1% | 1.5% |
| Net Income Margin | 38.1% | 30.4% | 31.3% | 31.6% | 32.0% | 0.4% |
| SG&A, % of revenue | 24.4% | 31.7% | 32.1% | 31.3% | 33.0% | 1.7% |
| CAPEX, % of revenue | 20.0% | 17.3% | 12.0% | 4.7% | 5.9% | 1.2% |
| ROIC | 25.4% | 18.9% | 17.3% | 15.0% | 13.3% | -1.7% |
| ROE | 22.0% | 16.9% | 16.2% | 15.1% | 12.9% | -2.2% |
| Net Debt/EBITDA | -2.3x | -2.7x | -2.0x | -2.8x | -3.3x | -0.5x |
Revenue and profitability
China Shineway Pharmaceutical Group Ltd's Revenue decreased on 7.8% in 2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased slightly on 1.5 pp from 40.5% to 42.1% in 2015.
Gross Margin showed almost no change in 2015. SG&A as a % of Revenue increased slightly on 1.7 pp from 31.3% to 33.0% in 2015.
Net Income marign showed almost no change in 2015.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 5.9% in 2015. The company showed big decline in CAPEX/Revenue of 11.4 pp from 17.3% in 2012 to 5.9% in 2015. For the last three years the average CAPEX/Revenue was 7.5%.
Return on investment
The company operates at good ROIC (13.32%) and ROE (12.91%). ROIC decreased slightly on 1.7 pp from 15.0% to 13.3% in 2015. ROE decreased on 2.2 pp from 15.1% to 12.9% in 2015.
Leverage (Debt)
The company paid down all the debt in 2015. Cash increased on 5.1% in 2015.
Appendix 1: Peers in Pharmaceuticals
Below we provide China Shineway Pharmaceutical Group Ltd benchmarking against other companies in Pharmaceuticals industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.
Top companies by Revenue growth, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| China Health Group Inc ($8225) | | 58.5% | -48.0% | -60.1% | 244.1% |
| Wai Yuen Tong Medicine Holdings Ltd ($897) | | -9.9% | 45.9% | -10.5% | 105.6% |
| Oriental Unicorn Agricultural Group Ltd ($8120) | | 30.2% | -78.1% | 16.8% | 100.8% |
| China Traditional Chinese Medicine Co Ltd ($570) | | 22.3% | 35.2% | 90.0% | 40.0% |
| Shandong Luoxin Pharmaceutical Group Stock Co Ltd ($8058) | | 37.0% | 13.5% | 9.4% | 30.5% |
| |
|---|
| Median (38 companies) | 7.4% | 15.7% | 13.7% | 16.3% | 4.0% |
|---|
| China Shineway Pharmaceutical Group Ltd ($2877) | | 7.4% | 2.6% | 1.9% | -7.8% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Luye Pharma Group Ltd ($2186) | 83.0% | 83.5% | 83.6% | 81.0% | 81.4% |
| Consun Pharmaceutical Group Ltd ($1681) | 75.5% | 75.7% | 79.1% | 78.3% | 80.7% |
| Jilin Province Huinan Changlong Bio-pharmacy Co Ltd ($8049) | 83.9% | 82.0% | 81.5% | 80.9% | 79.9% |
| Sino Biopharmaceutical Ltd ($1177) | 78.5% | 78.5% | 77.5% | 76.4% | 77.7% |
| China Health Group Inc ($8225) | 38.7% | 43.4% | 33.6% | 76.2% | 75.7% |
| |
|---|
| Median (37 companies) | 38.0% | 39.1% | 37.2% | 48.7% | 49.9% |
|---|
| China Shineway Pharmaceutical Group Ltd ($2877) | 65.6% | 65.3% | 67.4% | 66.3% | 66.2% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Northeast Tiger Pharmaceutical Corp Ltd ($8197) | 132.2% | 193.8% | 205,840.0% | -15,344.8% | 49,650.0% |
| Sihuan Pharmaceutical Holdings Group Ltd ($460) | 48.4% | 38.8% | 65.4% | 70.9% | 93.3% |
| Hua Han Bio-Pharmaceutical Holdings Ltd ($587) | 32.9% | 60.6% | 21.0% | 28.8% | 61.1% |
| U-Home Group Holdings Ltd ($2327) | 23.9% | 9.8% | -16.6% | -46.7% | 51.7% |
| Beijing Tong Ren Tang Chinese Medicine Co Ltd ($8138) | 29.7% | 41.3% | 45.4% | 47.5% | 49.1% |
| |
|---|
| Median (38 companies) | 17.0% | 18.7% | 19.7% | 21.4% | 20.0% |
|---|
| China Shineway Pharmaceutical Group Ltd ($2877) | 47.8% | 37.8% | 40.1% | 40.5% | 42.1% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Hao Wen Holdings Ltd ($8019) | 6.4% | 30.0% | 2.3% | 38.2% | 44.8% |
| Hua Han Bio-Pharmaceutical Holdings Ltd ($587) | 3.8% | 0.9% | 1.4% | 7.6% | 40.5% |
| Lee's Pharmaceutical Holdings Ltd ($950) | 8.5% | 18.6% | 20.9% | 7.1% | 26.1% |
| Tianda Pharmaceuticals Ltd ($455) | 4.8% | 6.0% | 3.9% | 10.5% | 24.4% |
| Lijun International Pharmaceutical Holding Co Ltd ($2005) | 19.5% | 16.8% | 52.4% | 39.6% | 18.7% |
| |
|---|
| Median (37 companies) | 10.3% | 8.2% | 8.1% | 7.6% | 4.4% |
|---|
| China Shineway Pharmaceutical Group Ltd ($2877) | 20.0% | 17.3% | 12.0% | 4.7% | 5.9% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Sino Biopharmaceutical Ltd ($1177) | 19.9% | 26.2% | 26.8% | 26.5% | 26.2% |
| Beijing Tong Ren Tang Chinese Medicine Co Ltd ($8138) | | 25.3% | 27.5% | 23.8% | 25.9% |
| Sihuan Pharmaceutical Holdings Group Ltd ($460) | 14.3% | 13.7% | 18.3% | 22.0% | 25.4% |
| Dawnrays Pharmaceutical Holdings Ltd ($2348) | 17.7% | 12.6% | 14.0% | 17.8% | 23.5% |
| Lee's Pharmaceutical Holdings Ltd ($950) | 31.3% | 26.1% | 22.0% | 22.4% | 22.7% |
| |
|---|
| Median (39 companies) | 8.5% | 12.2% | 9.3% | 11.1% | 10.1% |
|---|
| China Shineway Pharmaceutical Group Ltd ($2877) | 25.4% | 18.9% | 17.3% | 15.0% | 13.3% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Northeast Tiger Pharmaceutical Corp Ltd ($8197) | 2.2x | 2.3x | 3.7x | | 22.2x |
| U-Home Group Holdings Ltd ($2327) | 3.3x | 10.1x | | | 9.9x |
| Lansen Pharmaceutical Holdings Ltd ($503) | 0.9x | 1.7x | 2.8x | 3.4x | 4.7x |
| China Grand Pharmaceutical and Healthcare Holdings Ltd ($512) | 2.5x | 5.4x | 4.0x | 3.4x | 4.3x |
| United Laboratories International Holdings Ltd/The ($3933) | 4.4x | 6.5x | 4.6x | 4.2x | 4.0x |
| |
|---|
| Median (31 companies) | -0.4x | 0.0x | -0.2x | -0.6x | -0.3x |
|---|
| China Shineway Pharmaceutical Group Ltd ($2877) | -2.3x | -2.7x | -2.0x | -2.8x | -3.3x |
